According to Cuenca planning officials, 1,694 new building permits were issued from January to October of 2012, representing 845,000 square meters, or 9,137,500 square feet of new construction.
Although the numbers are down slightly from the October 2011 level, Pedro Medina, vice president of the Chamber of Construction of Cuenca, says the reason is that more permits are backed up in the review process than last year. “When they get through the backlog of applications the numbers should be higher than those for 2011,” Medina said. “We expect the high levels of construction in Cuenca to continue,” he said.
In all of 2011, 2,400 permits were issued for more than 1,200,000 square meters of construction, a 30 percent increase over 2010.
According Medina, construction accounted for 21 percent of Cuenca’s GDP in 2011. “It should remain about the same for 2012, maybe a little more,” he said.
Medina said the demand is due primarily to Ecuadorians returning to Cuenca from the U.S., Spain and Italy. “This has been driving the local market for five or six years.”
Emily Shaffer who provides relocation services for foreigners agrees
that it is Ecuadorians who are buying new residential units. “The general wisdom
is that the number of sales to expats peaked in late 2010 and has been
going down ever since. On the other hand, more foreigners are moving here than ever before and I can't find enough rentals
for them. I am happy to see so much construction since it
means there will be more apartments available to rent." Shaffer said that many rental
agents that deal with foreigners have very little to offer. "I just
checked with two companies and they are 100 percent booked. It's a tight market.”
Shaffer and Medina agree that real estate sales to English-speaking foreigners amount to a little more than 1 percent of all sales in the Cuenca canton.
Rafael Morena, a real estate agent, says that the high rate of construction is justified by market demand. “Most of the residential projects are sold out before construction is completed. This is a sign of a healthy market,” he says.
Morena believes that the rate of price appreciation may drop slightly in 2013. “There won’t be a large decline but I think, across the board, prices will rise about 8 percent, which is down from about 10 percent the last two years.”
Photo caption: More houses under construction in San Joaquin.